(By Salman - iStockAnalyst Writer)U.S. stock futures retreated sharply on Friday as despite several interventions by government and central bankers, recession fears continued to persist in the global equity markets. A virtually frozen credit markets weighed heavily upon the markets. On Friday, equity markets across Europe and Asia settled with heavy losses as the financial system remained paralyzed in various countries.

At 8:07 am ET, Standard & Poor's 500 Index futures expiring in December retreated 24.40 points to 888.10. Dow Jones Industrial Average futures lost 222 points to 8376. Nasdaq Composite Index futures slipped 23.75 points at 1248.25. At 13:20 London time, Europe's DJStoxx 600 index shrank 16.39 points or 7.39% to 205.39.

Friday was yet another bad day for global equity markets. Nikkei sank 9.62% on worsening credit crisis. Benchmark indices in Australia, Thailand, Hong Kong and India were all down atleast 7%. In Indonesia, authorities suspended trading indefinitely on the Jakarta Stock Exchange after they had halted trading on Wednesday when the benchmark index tumbled more than 10%.Regulators in Russia too ordered Moscow's rouble denominated MICEX not to open for regular trading at the usual time, and the opening of the dollar denominated RTS was also postponed until further notice, the state-run RIA-Novosti news agency said.

At 13:58 pm, London time, UK FTSE and French CAC dropped 7.91% and 8.23% respectively while German DAX retreated 8.86%.

The cost of borrowing in dollars for three months rose as high as 7 basis points on Friday, from 4.75% on Thursday. The Libor-OIS spread surged to a record 359 basis points.

Morgan Stanley fell 5% in European trading after Moody's Investors Service threatened to reduce the U.S. investment bank's credit rating. On Thursday, shares of Morgan Stanley (MS) finished down $4.35 or 25.89% to $12.45.

Fairfield, Connecticut- based diversified firm General Electric announced its third-quarter results. GE's net income dropped 22% to $4.31 billion, or 43 cents a share. From continuing operations, it earned 45 cents a share. Earlier in September, GE had already lowered it outlook and had issued guidance for earnings between 43 cents and 48 cents a share.

According to reports, U.S. authorities are considering fresh measures to contain the turmoil in financial markets, including guaranteeing billions in bank debt and insuring all U.S. bank deposits for a temporary period.

Late on Thursday, Citigroup Inc. announced that it is pulling out of bid for Wachovia. The bank also said that it is ending court efforts to block the merger agreement between Wachovia and Wells Fargo. However, Citigroup made it clear that it would still seek breach of contract damages from the two banks.

On Friday, President Bush will be making a statement on the current economic crisis. According to White House press secretary Dana Perino Bush is not expected to announce any new policy decisions, "He will assure the American people that they should be confident that economic officials are aggressively taking every action to stabilize our financial system," Perino said. "The Treasury Department, the Federal Reserve and the FDIC all have the necessary tools to address the problems we are facing."The Treasury Department is moving quickly to use new tools to improve liquidity, which is the root cause of this problem," she elaborated. "Americans should be confident that every effort is being taken to stabilize our markets."

On Saturday, Bush will meet with finance ministers from Britain, France, Germany, Italy, Canada, Japan and the United States at the White House.

Policy makers from the Group of Seven (G7) major industrial nations are due to meet in Washington tonight.

According to a Commerce Department release on Friday, US trade deficit narrowed by 3.5% to $59.1 billion in August.

NYMEX Crude Oil for November delivery slumped as much as $5.46 or 6.3%, to $81.13 a barrel.

Disclosure: Author does not own any of the stocks discussed here.